For immediate release: Tuesday 22 November 2005

IMA WELCOMES THE ADOPTION OF PRINCIPLE-BASED APPROACH TO UCITS

The Investment Management Association has submitted its response to the second consultation from the Committee of European Securities Regulators �CESR�s advice on clarification of definitions concerning eligible assets for investments of UCITS.�

IMA welcomes the extent to which CESR has listened to the concerns expressed in relation to the first consultation, in particular, the move away from overly detailed and prescriptive advice to a more principle-based approach.

The Association also welcomes CESR�s attempts to resolve a number of differences in the implementation of the UCITS Directive across the individual jurisdictions of the EU. It is hoped that this standardisation of the interpretation of the Directive will remove some of the difficulties currently experienced by management companies when registering their funds to be marketed cross border.

Some concerns however, do remain. CESR has advised the industry that there will be transitional provisions in place when the Commission adopts the revised definitions of eligible assets, however, the amendments to these definitions may require substantial changes to the internal processes of management companies. IMA has therefore recommended that in order to prevent significant disruption and reduce the costs of asset reallocation, CESR seriously needs to consider appropriate transitional provisions for all UCITS and not just those funds which will no longer be eligible under the Directive.

Sheila Nicoll, Deputy Chief Executive of the IMA, commented:

�Whilst some concern remains that the implementation of the UCITS Directive will continue to differ across EU member states, CESR�s efforts to streamline this implementation must be welcomed. CESR should be applauded for the way in which it has listened to the industry, and although some technical amendments still need to be ironed out, the adoption of a more light touch, principle-based approach should allow innovation in the UCITS market to continue.�

IMA�s response to CESR�s advice on clarification of definitions concerning eligible assets for investments of UCITS is attached.

-Ends-

For further information, please contact:
Helen Stephenson, Communications Officer, IMA,  020 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, 07834 089332